Sony Assigns $2 Billion R&D Budget to Games Division

[T0@st]

Sony Corporation was in a boastful mood back in March of this year—Hiroki Totoki, the firm's executive deputy president and CFO declared that a $5+ billion (JP¥700 billion) budget had to been allocated for strategic investments across several departments in 2023. At the time it was not made clear how much of that pot would be assigned to Sony Interactive Entertainment/PlayStation, but a new report published by Nikkei Asia's Business section has revealed that the Japanese multinational conglomerate is set to open up and reach deep into its "war chest."

As its battle with Microsoft/Xbox heats up, Sony has designated a 300 billion yen (converting roughly to $2.13 billion) to research and development for its game division for the fiscal year ending in March 2024. This is reportedly 40% of its total R&D spending, which will exceed its investments in two other key interests—namely electronics and semiconductors. Nikkei notes that "earnings before interest, taxes, depreciation and amortization (EBITDA) for the company's game business was about 337 billion yen ($2.4 billion) last fiscal year, up more than 60% from five years ago." Sony anticipates that the live service gaming market will hit a high of $19 billion in 2026, so it is shifting priorities from its traditional hardware-based model to an online system where customers are expected to buy add-ons for streamed content. Its $3.7 billion buyout of Bungie in 2022 formed a central pillar for this new strategy—the MMORPG-specialist studio is reportedly serving as a consultant on several live service projects in development at other SIE-owned outfits. The main goal seems to a targeted launch of 12 live service titles by the fiscal year ending March 2026.



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[dick_cheney]

Gaming will die the same death as film. they will shove out tons of triple A slop ever year with battle passes and cosmetics with the occasional great game that's not focused on monetary extraction.

 

[Assimilator]

All of that's probably just for the next Horizon: Zero Dawn sequel.

 

[chrcoluk]

Gaming will die the same death as film. they will shove out tons of triple A slop ever year with battle passes and cosmetics with the occasional great game that's not focused on monetary extraction.

Yeah some serious restraint is needed on budget, thats easily achievable if visual focus is significantly shrunk down, fmv's etc. I have played some great games which had very small budgets.

Without that, there will be the maximum extraction of revenue as you said, exclusivity deals, cosmetic DLC, loot boxes, high base prices etc.

 

[AnarchoPrimitiv]

It's only going to get worse with further consolidation of the industry....before long there'll just be two massive studios, we'll have less choice, prices will go up, and we'll experience all the other wonderful aspects of a default duopoly.

Just consider streaming services (Netflix. DISNEY+, etc.), researchers have observed that with the increased consolidation of studios and streaming services, we now have fewer media choices from fewer providers and at a higher cost.....consolidation, cartelism, and monopoly NEVER benefit the consumer.

 

[FeelinFroggy]

It's only going to get worse with further consolidation of the industry....before long there'll just be two massive studios, we'll have less choice, prices will go up, and we'll experience all the other wonderful aspects of a default duopoly.

Just consider streaming services (Netflix. DISNEY+, etc.), researchers have observed that with the increased consolidation of studios and streaming services, we now have fewer media choices from fewer providers and at a higher cost.....consolidation, cartelism, and monopoly NEVER benefit the consumer.

There are tons of indie developers out there that put out great games. As technology continues to improve, making high quality indie games that can compete visually with AAA titles will become easier and easier. Game development will only become easier as game engines evolve. One day it will be so easy that kids in class will be able to develop great looking games as a school project.

What's wrong with Sony spending 2 billion of gaming R&D? Sony makes great games and my only wish is they would all come to PC.

Sony is using the 2 billion to make games. Not mergers and acquisitions. As a gamer, I'm excited to hear game developers spending a lot of money on new games.

 

[dozenfury]

CEOs tend to try to replicate success, but sometimes that can be to the point of detriment. And that seems to be happening recently in gaming. The success of Last of Us as a game-show crossover is driving a lot of game devs from thinking they can do the same, but I'm not sure the market can really support that game-movie household name IP model. Most games don't translate to movie/show entertainment that well. So it does seem like a big financial trap for them if they spend really huge in that space hoping to strike gold. Because it can be a very expensive mistake if a big budget game/show adaptation flops. The game industry goes up and down in cycles, and this approach feels like it's setting the industry up for an inevitable big correction.

But for Sony specifically, this is their response to the merger approval. They realize they have their work cut out for them now and will have to double-down on putting out good quality exclusives. Good for gamers in the short-term, but Sony will have to be prudent moving forward and not have too many big budget misses. I really hope Sony is still in the space in 10 or even 20 years, because we already know that in gaming without good competition we get unoriginal bug-ridden trash games overflowing with microtransactions and DLC.

 

[SCP-001]

I know Sony has basically shut this down before, but I would absolutely love a Vita 2 or something similar from Sony. The Vita was ahead of it's time and was a fantastic device. In this market, I'm sure it would sell very well.

 

[Vayra86]

It's only going to get worse with further consolidation of the industry....before long there'll just be two massive studios, we'll have less choice, prices will go up, and we'll experience all the other wonderful aspects of a default duopoly.

Just consider streaming services (Netflix. DISNEY+, etc.), researchers have observed that with the increased consolidation of studios and streaming services, we now have fewer media choices from fewer providers and at a higher cost.....consolidation, cartelism, and monopoly NEVER benefit the consumer.

Exactly as predicted... good thing they only have a single piece of hardware to push it on. They dont own the PC. If anything this will shift more unique selling points to the wider variety of PC content.

 

[Bomby569]

Gaming will die the same death as film. they will shove out tons of triple A slop ever year with battle passes and cosmetics with the occasional great game that's not focused on monetary extraction.

Indiegames are doing just fine, making amazing fresh new concepts every month. AAA Gaming may be a shitshow, Gaming is not.

 

[Deleted member 229121]

I don't think things will quite get to that level of doom & gloom; this isn't the early 80s when gaming was a new medium.

Gamers will have more choice and the bottom lines will speak for themselves if AAAs don't deliver.
Indie games are alive and well on both PC and console now (currently filling a fat void on game pass).

Also this is more PC specific, but how much you wanna bet the next Battlefield goes back to basics after getting cold-cocked by 3x devs and some potato graphics?

 

[Bomby569]

Also this is more PC specific, but how much you wanna bet the next Battlefield goes back to basics after getting cold-cocked by 3x devs and some potato graphics?

I don't think Battlefield can get even more basic

I doubt they will change the formula, that's what people want, that's what makes money, they will just try and polish the turd

 

[Kn0xxPT]

I think Sony really needs too push quality games with IP's they have. ... and just fully integrate discord on PS! .
Sony needs to stop with half-baked games/integrations. GT7, Discord, etc etc...

 

[chrcoluk]

I know Sony has basically shut this down before, but I would absolutely love a Vita 2 or something similar from Sony. The Vita was ahead of it's time and was a fantastic device. In this market, I'm sure it would sell very well.

If that came out they would need to have integrated support for psp and vita 1 games, it gives it an immediate library.

 

[SCP-001]

If that came out they would need to have integrated support for psp and vita 1 games, it gives it an immediate library.

I'd 100% buy a Vita 2 if it could play my NFS underground on day 1